The Louisiana Supreme Court has affirmed the dismissal of a lawsuit brought by 23rd Psalm Trucking, L.L.C. against the Madison Parish Police Jury over a residential waste collection and disposal contract, ruling the agreement was null and unenforceable due to lack of state approval.
The court held on June 27, that the Police Jury’s four-year contract with the company constituted debt under state law and therefore required prior approval from the State Bond Commission. The Police Jury did not obtain such approval.
The dispute stemmed from a 2014 contract under which 23rd Psalm Trucking provided weekly residential waste collection for Madison Parish. The original four-year contract extended automatically for three years, ending July 2021. However, in June 2020, the Police Jury awarded a new waste collection contract to another company, prompting 23rd Psalm to sue for breach of contract and unfair trade practices.
The trucking company claimed the early termination of the agreement caused more than \$385,000 in losses. The Police Jury argued the contract was void from the outset because it lacked required approval from the Bond Commission, as mandated by Louisiana Revised Statute 39:1410.60. That statute prohibits local governments from incurring debt without commission approval. The Supreme Court agreed.
“The four-year waste collection and disposal contract at issue constitutes debt,” Justice Jay B. McCallum wrote. “The Police Jury did not have authority to incur debt to satisfy its contractual obligation… without the consent and approval of the Bond Commission.”
The justices concluded the contract was therefore unenforceable under Louisiana law and upheld the trial court’s summary judgment dismissing the suit with prejudice.
The court also rejected 23rd Psalm’s claim of detrimental reliance, stating the company failed to show it relied on official guidance or took legal steps to ensure the contract’s enforceability before signing.
Chief Justice John L. Weimer and Justice Jefferson D. Hughes III dissented. Weimer criticized the ruling as enabling public bodies to escape contracts by citing their own legal violations. “This would provide a public entity an opportunity to take advantage of a legal loophole… to the detriment of a private entity or person,” Weimer wrote.
The ruling finalizes a multi-year legal battle and signals that Louisiana public entities must secure bond commission approval for multi-year contracts involving financial obligations.
